March 2024

India Office:
Repurposed
to scale-up
Foreword
Foreword
Chairman, FICCI Real Estate Committee and
Chairman of Supervisory Board, RMZ Corporation
The India Economy is poised to play a defining
role as it leverages technologies and becomes
a beacon for the world amid tough geopolitical
scenario. The economy is likely to grow at
7.3% in FY24 and International Monetary Fund
(IMF) has noted that growth is likely to be
steady at around 6.5% for the next two fiscal
years. In a nutshell, the momentum will be
strong as the world recovers later this year
with India in particular expected to witness
broader economic growth.
India’s office market has shown resilience with
the infusion of 58.2 msf of leasing in 2023
enormously aided by the economy’s growth
path, business landscape and global occupiers.
With a positive domestic outlook and
promising growth prospects, the confidence of
occupiers and developers will remain intact.
There has been a paradigm shift in India’s
office market necessitating the need to adapt
to the changing workplace dynamics. A surge
in space uptake from domestic occupiers,
expansion of GCC and growth of new demand
segments will continue to dominate the
evolution of commercial office market. Skilled
manpower and competitive real estate costs
will continue to drive demand from global
companies.
BFSI and engineering and manufacturing
sectors have been pivotal in driving the overall
office demand notching up a robust 65% and
87% YoY rise respectively in 2023. Flex spaces’
demand surged 30% at 8.7 million sq ft. A
significant development is a surge in
large-sized leasing deals exceeding 100,000
sqft in 2023 with about half of the total leasing
Raj Menda
reported on such deals. This trend augurs well
for the commercial property market and
illustrates in no uncertain terms that businesses
are expanding and corporates are gearing up for
future employee expansions. The large-sized
deals are likely to touch 50-55% this year.
The Government’s decision to amend the SEZ
rules to allow floor-wise denotification will give a
virtual boost to the office leasing activity.
Though 61% of Grade A office stock was green
certified as of December 2023, an estimated
400-460 million sqft of existing office stock holds
potential to achieve complete e-compliance in
the coming years. This will offer substantial
green investment opportunity. With pragmatic
policy intervention leading to significant
infrastructure upgrades nearing completion
across major Indian cities, peripheral business
districts (PBDs) are likely to witness another
50-60 million sqft of commercial space
completions in the next two years. This will
undoubtedly offer quality office space options
for occupiers across diverse demand segments.
FICCI- Colliers report suggests that the growth of
the office market will depend on the changing
needs of occupiers. The report forecasts that in
an optimistic scenario total office leasing would
touch approximately 55-60 million sq ft across
the top six cities this year. The domestic
occupier activity will remain strong amidst
healthy domestic outlook. I am confident the
findings of the report would be most useful not
only for realtors, but also for consumers,
government, research & academic institutes, and
the industry. The ideas and deliberations arising
out of this report would go a long way in
reflecting on the way forward.
Foreword
Chief Executive Officer | Colliers
India continues to showcase resilience with its
steadfast growth trajectory, maintaining its
status as the world's fastest-growing major
economy. Driven by a growing consumer base
and continued focus on manufacturing sector,
economic prospects for 2024 appear promising.
The IMF takes cognizance of India’s inherent
strengths and has projected an annual GDP
growth rate of 6.5% for 2024 and 2025. India's
economic tenacity, coupled with a favorable
investment climate and rapid urbanization,
alongside robust infrastructure development,
collectively contributes to a thriving real estate
market.
Office market specifically, is undergoing a
significant transformation globally, fueled by
evolving work trends, technological
advancements, and shifting occupier
preferences. Amidst this dynamic landscape,
India's office market continues to demonstrate
robust growth year after year, recording
consecutive all-time leasing highs in 2022 and
2023. This surge in demand for office spaces in
India is underpinned by a myriad of factors. The
country's compelling economic performance,
coupled with a consumption pattern driven by
its demographic dividend, creates a fertile
ground for commercial real estate development.
Moreover, the availability of skilled talent and
the growing affinity of global occupiers to
establish their capability centers in India further
fuels the demand for office spaces across the
country. The sustained uptick in leasing volume
reflects the confidence of both domestic and
international occupiers in India's commercial
real estate market, instilling optimism for
continued momentum in the near future.
Badal Yagnik
As industry experts reflect on the successful
navigation of global headwinds and initial
uncertainties of 2023, one anticipates 2024 to
be a year of consolidation, highlighting
greater stability within India's office market.
The positive year-to-date gains (5-15% as on
Feb 26th 2024) for all three listed office REITs
on benchmark indices underscore this
sentiment, reflecting investor confidence and
optimism for the future. The outlook for 2024
remains optimistic, buoyed by multiple
driving factors including increasing demand
for flexible workspaces, and continued
investment in technology infrastructure. The
adoption of green leasing practices is also
expected to gain momentum, aligning with
the global commitment towards
sustainability.
Moreover, we expect domestic occupiers,
GCCs, and flex activity to remain robust,
maintaining leasing volumes similar to 2023
levels. Demand base diversification,
meanwhile, is poised to continue, further
enriching the commercial real estate
landscape. As we navigate through this period
of change and opportunity, it is clear that the
office market is poised for further growth and
innovation. With its resilience, attractiveness,
and boundless potential, India will continue to
solidify its position as a key player in the
global commercial real estate arena,
contributing immensely in shaping the future
of workspaces worldwide.
contents

01
India Office: setting
02
Emerging trends in India’s
new benchmarks office market
2023 performance overview Domestic enterprises to bolster
01 03
and cues for 2024 overall leasing activity

GCC activity to pick up pace 04

Tenant base diversification to

05

03
continue

Evolving work-models to spruce up 06

flex space market

Large-sized deals to drive leasing

07
India office demand to even in 2024

remain strong in 2024

SEZ developments can witness
08
Impact of key drivers on office improved occupancy levels
11
leasing in 2024
Green penetration to make
09
2024 office market forecast 12 further inroads

Infrastructure upgrades to
10
complement office market in PBDs
India office: setting
new benchmarks

2023 performance overview and cues for 2024

Although office space demand treaded cautious waters in the initial few months of 2023, the inherent
strengths of commercial real estate in India drove a remarkable turnaround especially in the second half of
the year. 2023 recorded an impressive 58.2 million sq ft of leasing activity, 16% higher than previous high of
2022. The trend underscored the increasing demand for office spaces across the country, driven by a
combination of factors such as economic expansion, evolving business & regulatory landscape, and the
continuation of India as a preferred destination for global occupiers. The sustained uptick in leasing volumes
reflected the confidence of both domestic and international occupiers in India's commercial real estate
market, further fueling optimism for continued momentum in the near future. On the supply side too,
developers reciprocated the confidence in heightened leasing activity. With infusion of more than 50 million
sq ft of Grade A developments, 2023 witnessed 17% higher completions as compared to 2022.

If 2023 marked the successful navigation amidst global headwinds and domestic uncertainties, 2024 is
anticipated to symbolize a period of consolidation on solid groundwork, signifying stability within India's
office market. Offices across the globe are being repurposed as companies step up the pursuit of bringing
employees back to the workplace. The return-to-work (RTW) trend reflects a gradual shift towards normalcy
and the importance of in-person collaboration for productivity and innovation. The RTW trend is stronger in
India as compared to peers in APAC, US and EU region. As companies in India navigate this transition,
occupier requirements will persistently evolve, prompting continual realignment of market offerings. With
promising growth prospects in the Indian economy and a positive domestic outlook, the confidence of
occupiers and developers remain intact.

The balanced interplay between demand and supply will aid in improved occupancies; potentially
accommodating a rental upside across major office markets of the country.

58.2 msf 50.1 msf

Gross absorption New supply

16% YoY 2023 2023

17% YoY

Vacancy WAQ Rentals

(As of 2023 end) (As of 2023 end)

50.3 msf 43.0 msf

2022
17.4%
100 pp rise YoY
₹ 96.5
/sf/month 2022
1.7% YoY rise

Source: Colliers | Data pertains to Grade A buildings only

Data pertains to top 6 cities- Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, and Pune India Office: Repurposed to scale-up | 01
Emerging trends in
India’s office market

India's office spaces are in a transitionary phase, continuously adapting to the changing workplace
dynamics. Several factors will be at the cornerstone of shaping office demand in years to come.
Increasing space uptake from domestic origin occupiers, expansion of Global Capability Centers
(GCCs), and growth of new demand segments will play a prominent role in the evolution of
commercial office market in India. Additionally, the growing prominence of sustainability and
technology will increasingly influence businesses to prioritize eco-friendly office spaces adept with
technologically advanced features. These multifaceted factors underscore a dynamic shift signaling a
new era of innovation and adaptation in India's commercial real estate sector.

Infrastructure driven PBD growth Domestic demand uptick

Heightened GCC activity

green leasing bounce-back

Em et
erg
m ark
ing e
t ren c
ds ’s offi
i n I n d ia

Improvements Tenant base

in SEZs’ diversification
occupancy
levels

Increasing prevalence of Surge in flex

large-sized deals space market
Source: Colliers

India Office: Repurposed to scale-up | 02

 Domestic enterprises to bolster overall
leasing activity
In the past 2-3 years, amidst relatively lower space uptake from
foreign-origin companies, domestic firms have emerged as key drivers
of office space demand in India. During 2023, domestic companies
accounted for about half of the total leasing across the top six cities,
compared to 34% in 2019. This trend is likely to continue in 2024, as
domestic companies will continue to capitalize on India's rapidly
growing economy, favorable demographics and increasing
urbanization. Expansion of corporate India operations is likely to
increase employment opportunities and ultimately provide a spurt to
real estate demand in Tier I cities of the country. Moreover, continued
government focus on programs such as 'Make in India' and
sector-specific Production Linked Incentives (PLIs) will further foster a
conducive ecosystem for domestic enterprises, encouraging them to
invest in office spaces to accommodate growth. With a focus on
innovation, talent acquisition, and newer market penetration, these
domestic enterprises are likely to seek larger office spaces to
accommodate their growing workforce and facilitate collaboration,
driving further momentum in India's commercial real estate sector.

Domestic vs. Foreign occupiers office leasing trend in msf (2019-2023)

70

60

50
Gross leasing in msf

40

30

20
49%
10 49%
34% 40%
30%
0

2019 2020 2021 2022 2023

Leasing by domestic Leasing by foreign (XX%) - Share of domestic

origin occupiers (msf) origin occupiers (msf) leasing in overall leasing

Source: Colliers
Data pertains to Grade A buildings only | Data pertains to top 6 cities- Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, and Pune
Note: Origin centres have been arrived at by analysing the leasing data through a broad-based framework of occupier profile, operative
region, etc . This is used as a proxy to determine the indicative geographical split of businesses.

India Office: Repurposed to scale-up | 03

 GCC activity to pick up pace
One of the brightest prospects for India’s office market is the anticipation of an
increase in GCC leasing activity in 2024 and beyond. Heightened GCC activity,
coupled with expectation of continued healthy demand provides credibility to a
positive outlook for the overall India office market. Gathering confidence from
continuity of the India growth story, Global Capability Centers (GCCs) in India
have already resumed their office leasing activities in a steadfast manner. In
2023, GCC demand for Grade A office space saw a steady uptick registering a
14% YoY rise. H2 2023 specifically saw highest GCC leasing since 2020 at 12.4
million sq ft across the top 6 cities of the country. Amidst improved business
sentiments and country’s positive economic outlook, GCCs in India are likely
to gain further ground, contributing to over 40% of the total office
demand in the next 1-2 years. Technology and BFSI sectors will continue to
dominate GCC leasing activity, while growing interest from engineering &
manufacturing and healthcare will further diversify the landscape.

Strong momentum in GCC activity – A tale of two distinct halves in 2023

City wise gross GCC leasing in msf-

4.5

2.7
2.3
2.1
1.8 1.8
1.4
1.2 1.2
0.9
0.8
0.6

Bengaluru Chennai Delhi NCR Hyderabad Mumbai Pune

GCC Leasing - H1 2023 (msf) GCC Leasing - H2 2023 (msf)

Source: Colliers | Data pertains to Grade A buildings only

Effectiveness in terms of both skilled talent and real estate costs will continue to
attract global companies from markets such as the US and EU to ramp up their
India operations. Furthermore, GCCs in India will continue to evolve from pure
back offices to knowledge, innovation, and R&D centers. Despite rising
competition, India is likely to remain the top choice for global companies for
expansion of their capability centers. Cultural affinity, English proficiency, data
protection, and time zone compatibility with origin centres and data protection
norms, will continue to attract GCCs and MNCs in India. Furthermore, a robust
IT infrastructure, coupled with an effective regulatory framework will contribute
to heightened GCC activity in the near-mid-term and this will play a crucial role
in demand for office spaces in the country.
India Office: Repurposed to scale-up | 04
Tenant base diversification to continue
Over the past few years, the occupier profile in India’s
office market has undergone a noticeable
diversification, marking a significant shift from its
historical reliance on Technology sector. Once a highly
dominant influencer in overall Grade A office space
uptake, leasing activity of occupiers from the
Technology sector has encountered a relative
slowdown over the last 2-3 years. This can be
attributed to numerous factors ranging from cautious
global economic environment, growing adoption of
hybrid work policies and workforce realignments to
real estate cost optimization. The declining
prominence of technology sector's share in overall
office leasing, is evident from the contribution steadily
decreasing from 47% in 2020 to 25% in 2023. At the
same time, BFSI and Engineering & Manufacturing
sectors have been pivotal in driving overall office
demand of the country, registering a significant
65% & 87% YoY rise respectively in 2023.
Additionally, government initiatives to promote sectors
like startups, healthcare, and renewable energy are
further stimulating demand across varied sectors by
encouraging investment and expansion. Concurrently,
the overall leasing landscape is anticipated to grow
and diversify, with flex spaces, BFSI, Engineering &
Manufacturing contributing to significant office space
demand in the near to medium term.

Sectoral demand pattern in gross leasing (2019-2023)

100%

80%

60%

40%

20%

0%
2019 2020 2021 2022 2023

BFSI Engg. & Mftg. Flex spaces Consulting Healthcare & Pharma Others* Technology

Source: Colliers
Data pertains to Grade A buildings only | Data pertains to top 6 cities – Bengaluru, Chennai, Delhi-NCR,
Hyderabad, Mumbai, Pune | Others include Consumables, Logistics, E-commerce etc. India Office: Repurposed to scale-up | 05
Evolving work-models to spruce up flex space market

45.6 msf 35 msf 2x 8.7 msf

Total Grade A Upcoming flex Rise in Flex Flex leasing in
flex stock (as of supply 2024-26 stock since 2023
2023) 2019

Source: Colliers | Data pertains to Grade A buildings only | Data pertains to top 6 cities – Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, Pune

Flex spaces, offering cost-effective alternatives to traditional offices and greater

flexibility in lease terms, are poised to remain integral to the future of work,
providing dynamic solutions that align with the evolving demands of the
modern workforce. The flex space stock in India has experienced robust
growth, almost doubling up in 2023 vis-a-vis 2019. The expansion has closely
followed the overall spurt in demand for flex spaces in the country, which has
surged 30% at 8.7 mn sq ft in 2023 compared to 2019.
Year-wise flex stock and flex stock penetration (2019-2023)
6.4%
50

45
2X 5.7%
40

35 5.1%
30
4.6%
4.5%
25

20

15

10

0
2019 2020 2021 2022 2023
Source: Colliers
Data pertains to Grade A buildings only | Data pertains to top 6 cities – Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, Pune | XX% - values show the penetration of flex spaces in the
total Grade A office stock in each city

As flex spaces increasingly go mainstream and Given the dynamism flex operators provide, flex spaces
establish themselves at the core of evolving are best suited to bridge the demand supply gap of
hybrid work models, the outlook for flex spaces high-quality commercial assets in Tier II and III cities of
remains optimistic. Interestingly, Tech sector’s the country. Furthermore, flex activity is likely to get a
rising preference for flex space is likely to boost as organizations increasingly prefer having a
support growth and expansion of such spaces decentralized work model, with a hub office in central
across the top six cities. Share of flex space in area and satellite offices in sub-urban/peripheral areas
Tech occupiers’ portfolio has risen from 5-8% in of the city. Simultaneous prevalence of hybrid work,
2019, to 10-12% in 2023, and is further occupier adoption of core + flex strategies and
anticipated to rise in next 1-2 years. The overall increasing return to office mandates in corporate India
flex stock penetration, meanwhile, is will boost overall flex space demand in the country. 2024
expected to reach double digits in the next is likely to witness 15-20% of Grade A office demand
2-3 years, compared to 6-7% currently. emancipating from flex spaces.
India Office: Repurposed to scale-up | 06
Large-sized deals to drive leasing even in 2024
Large-sized deals (≥100,000 sq ft) have seen a notable resurgence in India's office leasing market, spanning
across various occupier sectors. During 2023, about half of the total leasing was through large-sized deals.
BFSI, Engineering & Manufacturing and Flex spaces particularly witnessed increase in large sized
transactions contributing significantly to the total space uptake. As businesses seek to consolidate
operations and capitalize on emerging opportunities, the revival of these sizable
transactions is poised to further propel India's office leasing market into a new phase
of growth and dynamism. The share of large-sized deals in the overall demand of
office spaces in India is likely to be at 50-55% in 2024, slightly up from the
45-50% 2-3 years ago. Although the percentage change may not be significant,
given the current base, the volume of large-sized deals in 2024
~130
is anticipated to be worthy of attention. The anticipated
growth in large sized deals is also a leading indicator that
businesses are expanding and corporates are planning
~115 for future employee expansions.

Year-wise number of large deals

(≥100,000 sq ft) (2019-2023) ~95

~70
~65

2019 2020 2021 2022 2023

60,000-63,000 sf

Typical transaction size 54,000-56,000 sf

range (2023)

49,000-51,000 sf

40,000-42,000 sf

38,000-40,000 sf

31,000-33,000 sf
Flex Space
Engg. & Mftg.

BFSI

31,000-33,000 sf
Technology

29,000-31,000 sf
Consumables
Healthcare
E-commerce

Source: Colliers
Consulting

Data pertains to Grade A buildings only

Data pertains to top 6 cities – Bengaluru, Chennai, Delhi-NCR,
Hyderabad, Mumbai, Pune

India Office: Repurposed to scale-up | 07

SEZ developments can witness improved occupancy levels

Total SEZ stock Upcoming SEZ supply

2023 2024-25
176 msf 10 msf

Source: Colliers | Data pertains to Grade A buildings only | Data pertains to top 6 cities – Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, Pune
Others include Consumables, Logistics, E-commerce etc.

As of 2023, SEZs account for about 25% of the existing Grade A office stock across the top six cities. Since the
last few years, SEZs have been recording high vacancy levels of over 20% due to stringent provisions and
lack of incentives in the old SEZ policy. Furthermore, ever since direct tax benefits were taken away for new
units in SEZs from March 2020, SEZs lost their appeal leading to significant occupier exits and relocations to
non-SEZ office spaces. As a result, the share of SEZs in the overall office leasing dropped from 22% in 2019
to mere 7% in 2023. However, the 2023 decision to amend SEZ rules and allow floor-wise denotification is
expected to boost the leasing activity across SEZs, improving occupancy levels by about 5% in next
1-2 years. Going forward, SEZs are projected to attract a diverse tenant base, including both export-oriented
and domestic businesses, accelerating the overall office leasing activity across SEZs.

City-wise SEZ stock and vacancy as of 2023

22%
60

Pan-India
17% SEZ stock
176 msf
50
138 msf

40

32%
30
SEZ stock (msf)

19%
20 21% 18%

10
23%

0
Bengaluru Chennai Delhi NCR Hyderabad Mumbai Pune

Total SEZ stock (msf) Occupied stock (msf) Vacant stock (msf) XX% - Vacant as of Q4 2023
Source: Colliers
Data pertains to Grade A buildings only

India Office: Repurposed to scale-up | 08

Green penetration to make further inroads

61% Green penetration

Pan India (as of 2023) 432msf Grade A green stock
(as of 2023)

Source: Colliers
Data pertains to Grade A buildings only
Data pertains to top 6 cities – Bengaluru, Chennai, Delhi-NCR,
Hyderabad, Mumbai, Pune

Amidst increasing global awareness of climate change, sustainable practices in India's commercial real
estate sector have been gaining traction. Sustainable practices in India, though predominantly voluntary, are
gaining momentum, particularly within the realm of commercial realty. As of December 2023, 61% of Grade
A office stock was green certified, with Bengaluru and Hyderabad leading the growing adoption of
sustainable elements in office buildings. Stakeholders across the sector are increasingly embracing
sustainability reporting, reflecting a broader commitment to eventual net-zero targets. Green leasing is also
expected to gain momentum as occupiers and developers continue to align with ESG principles.

Looking ahead, an estimated 400-460 million sq ft of existing office stock holds potential to achieve
complete E-compliance either through retrofitting (major refurbishment) or E-upgrade (minimal
capex) in the coming years. This will offer substantial green investment opportunities in the office
market of the country. Furthermore, a significant proportion of upcoming commercial developments are
likely to become E-compliant from day 1 of operation. This has the potential to translate into green-certified
Grade A office stock surpassing 550 million sq ft (65-70% of overall office stock in India) by 2026. Developers
will take cognizance of tangible benefits of green buildings and thus E-upgrade/retrofitting initiatives are
certain to be more pervasive in the India office market. E-upgrades to existing buildings typically tend to
offer significant net cash flow benefits through enhanced energy efficiency and improved occupancy levels.

Green penetration in Grade A office stock of 6 top cities in India

100%
Green office stock
80% Non green office stock
71% 71%
60%
59% 61% 61%
57%

40%
41%

20%

0%

Bengaluru Chennai Delhi NCR Hyderabad Mumbai Pune Pan India

Source: Colliers
Data pertains to Grade A buildings only | Data is as of Q4 2023
Percentage indicates share of green stock in total office stock India Office: Repurposed to scale-up | 09
Infrastructure upgrades to complement office market in PBDs

With significant infrastructure upgrades nearing completion across major Indian cities, the office market is
set to receive a significant boost in 2024. Since key projects connect outskirts to central areas of respective
cities, the impact of infrastructure upgrade is likely to be more pronounced in Peripheral Business Districts
(PBDs) as compared to Secondary and Central Business Districts (SBDs and CBDs). Developers in
anticipation of heightened leasing activity in PBDs are expected to increasingly focus on timely completion of
marquee commercial developments in such localities. At present, with 232.8 million sq ft, around 33% of the
total Grade A office stock across the top six cities is located in PBDs. Peripheral locations are likely to witness
another 50-60 million sq ft of completions in the next 2 years, which will offer superior quality office
space options for occupiers across diverse demand segments. As employees are being encouraged to
return to offices in increasing numbers, organizations are likely to prefer incremental space take up in
peripheral and secondary business districts which are close to residential catchment areas. Grade A
commercial developments in PBDs offer a rental advantage over similar properties in SBDs and CBDs. This
will continue to boost leasing activity in micro markets typically identified as PBDs, bringing down the
average vacancy levels to 10-15% from current levels of 15-20%.

Micro market wise anticipated supply and stock trend in India office market

708.5 msf ~800-850 msf

Existing stock Future stock

5-10%

10-15%

~100-150 msf
Supply pipeline
35-40%
30-35% (2024 & 25)
50-55%

35-45%

5-10%

50-55% 50-55%

2023 2025F
Source: Colliers | Data pertains to Grade A buildings only | Data is as of Q4 2023

India Office: Repurposed to scale-up | 10 SBD PBD CBD

India office demand to
remain strong in 2024

India's office leasing market has exhibited resilience year after year, with ongoing growth buoyed by
numerous factors including uptick in demand from domestic occupiers, resurgence in GCC confidence, etc.
In the backdrop of a strong performance in 2023, the Indian commercial real estate market paces
confidently in 2024. Stakeholders are poised to embrace multiple emerging trends that promise to reshape
contours of the Indian office landscape. Fueled by a blend of domestic optimism and global dynamism, the
year ahead holds potential for solidification of the new benchmark in the office arena. Notwithstanding
unforeseen events, annual leasing activity and supply infusion upwards of 50 million sq ft are likely to be a
regular feature in the Indian office market for the next few years.

Impact of key drivers on office leasing in 2024

2022 & 2023 2024 & Beyond

Impact assessment

Domestic occupiers’
space takeup

GCC activity

Core+Flex workplace
strategies

Sectoral
diversification

Sustainability

Large deal sizes

SEZ activity

Low Medium High

Source: Colliers

India Office: Repurposed to scale-up | 11

2024 office market forecast

The trajectory of the office market's growth in 2024 will rely Nevertheless, in all
significantly on the evolving space requirement of occupiers. likelihood domestic
Multifaceted factors such as global economic undercurrents and occupier, GCC and flex
domestic consumption will play elemental roles in shaping the activity are likely to
course of commercial real estate in India. Colliers has modelled remain strong, keeping
three probabilistic scenarios to assess the demand and supply of the overall leasing
Grade A office space across six major cities of the country in 2024; volume similar to 2023
the scenarios being optimistic, pessimistic, and realistic. levels. Demand base
diversification will
In an optimistic scenario, we anticipate economic tailwinds to pick
continue in 2024 as well.
up pace, boosting the overall confidence of occupiers in business
While there is a strong
expansion activities. Under this scenario, Colliers forecasts total
supply in the pipeline
office leasing of approximately 55-60 million sq ft across the top
across key markets, the
six cities, with minimal impact of unforeseen events or geopolitical
actual influx of office
tensions. Real estate space uptake from GCC occupiers, especially
space is anticipated to
from the US and EU will witness impressive growth as compared to
closely align with
the muted activity of past few years. With most operators realizing
demand. Prevailing
their expansion plans successfully, flexible spaces will further
market sentiments and
solidify their presence in India.
pre-commitments will be
In a realistic scenario, impact of externalities will be moderate, and critical in developers
a fair degree of global volatility will affect India office market standing by their project
sentiments. In this case, the demand will remain steady and stay completion timelines.
put around 50-55 million sq ft. Domestic occupier activity will Rental rates and vacancy
remain strong amidst healthy domestic economic outlook, while levels are forecasted to
space enquiries from foreign origin companies may not witness an stay rangebound.
uptick as envisaged in the optimistic scenario.

Alternatively, in a pessimistic scenario, prolonged economic

headwinds may dampen leasing activity, leading to
postponements in decision-making by occupiers amid
expansionary uncertainties. In such circumstances, we project
office leasing to be in the range of 45-50 million sq ft.

Gross leasing forecast New Supply forecast

2024 in msf 2024 in msf

55-60
58.2
55-60
50.3 50-55
50.1
45-50 45-50
43.0
40-45

2022 2023 2024F 2022 2023 2024F

Pessimistic Realistic Optimistic

Source: Colliers
Data pertains to Grade A buildings only
Data pertains to top 6 cities – Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, Pune

India Office: Repurposed to scale-up | 12

For further information, please contact:
Neerja Singh
Arpit Mehrotra Assistant Secretary General
Managing Director Logistics & Infrastructure
Office Services | India neerja.singh@ficci.com
arpit.mehrotra@colliers.com

Vimal Nadar
Senior Director & Head
Research | India
vimal.nadar@colliers.com

Authors:
Suryaneel Das
General Manager
Research | India
suryaneel.das@colliers.com

Pallavi Kukdolkar
Deputy Manager
Research | Pune
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